Conclusion of Contract Under the Draft Common European Sales Law

Abstract

On October 11, 2011, ten years after the launch of the consultation process in 2001, the European Commission published its Proposal for a Regulation on a Common European Sales Law (CESL). Under the Proposal, CESL constitutes an optional contract law regime available for cross-border contracts between a trader and a consumer (T2C) or between traders if at least one party, seller or buyer, is a small or medium-sized enterprise (SME) (T2T). In Arts 30-39 the proposed CESL contains the provisions on ‘conclusion of contract’. As far as they go, they largely reflect the Draft Common Frame of Reference (DCFR) on ‘formation’ of contract (and the Feasibility Study (FS)) as well as other international and regional texts, notably CISG, PICC and PECL. However, the opt-in nature of the proposed CESL requires a mechanism for subjecting a particular contract to CESL as the governing contract law regime. This mechanism is now contained in Arts 8 and 9 of the Regulation designed to give effect to the proposed CESL and constitutes the most significant innovation of the Proposal as compared to the DCFR. At the heart of this mechanism is an agreement between the parties to ‘opt in’ to the proposed CESL. This agreement to use CESL is distinct and conceptually separate from the agreement resulting in the contract under the proposed CESL. It is not a choice of law in the conflict of laws sense because CESL, if adopted, would be a second national contract law regime within the law of every Member State (similar to CISG in the signatory states albeit of an ‘opt-in’ rather than ‘opt-out’ nature). The agreement to use CESL and the agreement to conclude a contract under CESL constitute two different layers of agreement. The proposed Regulation contains the formal requirements for the agreement to use CESL. The substantive requirements of this agreement – consensus, invalidity, mistake and the like – are a question of the applicable national law, which might be the provisions of CESL itself as far as they go. The contract under CESL will be governed exclusively by the rules of CESL to the extent that the respective matters are addressed by CESL. The applicable (non-CESL) national law will continue to govern ‘matters’ outside the scope of CESL Thus, at both layers of agreement the rules of the proposed Regulation and CESL will interact with the applicable national law in a number of ways. Moreover, both agreements will be interdependent and the finality of an exchange of assets between the parties can be determined only by considering both agreements together and possibly in conjunction with national law.